Public sector pay agreements outpace rest

Some public servants were securing hefty pay rises just weeks before May federal budget revealed savage job cuts.

The public sector was settling on enterprise bargaining agreements in the March quarter well above the rate of inflation, and higher than those for private business employees.

Public sector average annualised wage increases from agreements finalised in the first three months of the year rose by 0.5 percentage points compared to the previous quarter, to 3.9 per cent, government figures show.

The private sector average was unchanged at 3.6 per cent.

These compare with an inflation rate of 2.9 per cent and the Reserve Bank of Australia's preferred measure of wages growth - the wage price index - which showed annual growth at a lowly 2.6 per cent as of the March quarter.

The May budget confirmed 16,500 public sector jobs would be scrapped in the next few years as the government attempts to cut back on spending to bring federal finances under control.

The tough budget sparked a negative reaction that continues to linger among consumers, as well as the public sector.